Analysis of the theory of railroad rates begins naturally with a study of railroad expenditures. The examination of earnings is not feasible until a later time. For neither a railroad nor a factory can earn money until it has first liberally expended it. A physical plant must be provided, in the first place, which means the guarantee of interest on a large capital; and, secondly, it must often be operated unprofitably at the outset. This is especially true in a new and undeveloped country like the United States; where demand for transportation must be frequently created by the invasion of virgin territory, making it inviting for settlement. Twenty years ago such an analysis of railroad expenditures with any approach to precision, owing to the absence of scientific data, would have been impossible. A few companies, such as the Pennsylvania, the Union Pacific and the Louisville & Nashville, had indeed attempted to systematize their accounts; but there was no agreement as to details, despite a certain harmony in questions of principle. But since the passage of the Act to Regulate Commerce in 1887, and largely owing to the work of Prof. Henry C. Adams as statistician to the Interstate Commerce Commission, the matter may now be examined profitably in detail. The data is published annually in a volume entitled "Statistics of Railways in the United States." The amplified powers of the Interstate Commerce Commission since 1906 have considerably changed the system in force since the original law of 1887; but the general principles remain unchanged.[29] One feature of the new law, however, is important. Not only must detailed reports be periodically and promptly made; but no company is now permitted to keep its books in any other form than the one officially prescribed. This standard was adopted after extended conference with the Association of American Railway Accounting Officers, which body has, in fact, officially approved of the form adopted in most regards. These accounts, therefore, may be said to represent the combined intelligence of the practical and theoretical analysts, of the operating and financial staffs, and of the governmental supervisory board. A great impetus to scientific railroad economics has undoubtedly resulted from this coöperation between government officials and private managements.